IC in two locations/conflict in rates

[m1sticka]

I will be working in a new, second location in NH as an IC renting space from an MT who charges less than I do. She has a day spa and often receives tips in addition to her hourly rate.

In my private practice in MA, my hourly rate is higher than hers and occasionally receive tips, and I'm wondering what I should do in setting my fees.

Any ideas?

 

[tuhreza]

Thats tough!
Sounds like you are going to have to do some research about the area to find out if she is going with the average rate or not. Maybe it is time for her to increase her rates anyway!
A way to increase without shocking her clientel right off the bat is to offer a massage session (or more) at her current rate with you, and then go up after the first few times to a rate you are comfortable with.
That is what a few girls at a spa I used to work at did when they came from a spa that charged less.
I am all for keeping your pricing, or close to it. We are worht every penny we charge!!!
Either way you are going to have to talk to her about how she feels about the situation. Just be prepared with information to back what you are going to talk about. (such as rates of similar places in the area)
Good Luck!

 

[maikabarrett]

She's the only MT in the town (small town), and surrounding towns with other MTs and high end spas do charge more. She has only been in business since January '07 and I doubt she wants to raise her rates.

Some of her clients are from the surrounding areas and come to her because her rate is lower. If she raised her rates she feels some of her clients may not come back (with the price of gas being what it is) and would likely go to an MT in their own town.

 

[2hot4u69]

The place I work has 5 therapists, and we all charge our own rates for things. There are people who are on the low end, and people on the high end. Everyone has their own clients. I haven't noticed anyone leaving the higher-rate therapist to go to one with a lower rate in our office.
People will stick with the therapist that they feel gives them the best massage. They might try out a lower priced one, but ultimately, they would come back to whoever they like the best.
Price is only a small factor as to why clients come to you

 

[Elorselommepe]

I will be working in a new, second location in NH as an IC renting space from an MT who charges less than I do. She has a day spa and often receives tips in addition to her hourly rate.

In my private practice in MA, my hourly rate is higher than hers and occasionally receive tips, and I'm wondering what I should do in setting my fees.

Any ideas?

She's the only MT in the town (small town), and surrounding towns with other MTs and high end spas do charge more. She has only been in business since January '07 and I doubt she wants to raise her rates.

Some of her clients are from the surrounding areas and come to her because her rate is lower. If she raised her rates she feels some of her clients may not come back (with the price of gas being what it is) and would likely go to an MT in their own town.

It sounds like you have both already spoke about the fee schedule plans, as you've already taken the position. Or have you?

What have you both discussed at this point?

It may help to give feedback a little more usefully.

 

[jenny_lynn_23]

When we first met this past Monday, we spoke about many things, including rates, scheduling, etc., but she has not confirmed for sure that she would like me to work there. We went into great detail about things and it sounded like she was sure she wanted me there. I felt that we hit it off and it would be a great fit since we both share similar backgrounds and are interested in some of the same healing methods.

I emailed her a few days ago and have not heard back from her. I will call her tomorrow if I don't hear anything, because I am going to work there, I want to start planning my marketing strategies.

 

[Pho]

I may be a bit slow right now, but may I ask... Regarding the quote:

In my private practice in MA, my hourly rate is higher than hers and occasionally receive tips, and I'm wondering what I should do in setting my fees.

what was the conversation you both had regarding the difference in fees?

I would love to try and help, but it's hard to come up with help, not knowing what the conversation has already discussed.

Ex. If she wants both fees to be the same, it would be helpful to know (along with any other fee discussions).

Does that make sense?

 

[Katrina :D]

I've had a hard time understanding the question, in part because I get hung up on being an IC (which I view as working essentially with someone else's clientele and agreeing to their fee schedule) and renting (which I see as you pay rent on a space and all other choices are yours, fees, hours, etc. YOUR business).
My input is if you are simply renting, then charge what you charge. If you are working as a contractor in her business, then you may have some negotiating to do.

 

[regular american]

We briefly mentioned that our fees differed and not much else, considering this was our initial meeting. I am guessing we'll discuss that further once it has been established that I will, in fact, be working in her space. She didn't express an opinion either way, just acknowledged that our fees differed, and maybe wondered the impact it may have on me - I don't know.

My understanding of an IC is quite different than yours, mtnlionz, whereby what you describe as an IC is really an employee, at least here in MA. That's what I would be, not an employee.

IC, the way I see it, IC = independent, separate from - so that would mean I would be my own entity within this person's space, and either rent the space per session, or do a split. I've read some where that using the split form of payment could be viewed as being an employee, so I think a flat rate would be the better way to go in the eyes of the IRS.

So yes, that status would allow me to charge what I want, and I can, but I wonder whether it is a good business decision when trying to build a new business under her roof, and when possibly I would be seeing some of her clients when she was not available.

I am planning on calling tomorrow if I don't hear from her - I would like to know for sure what direction to take in this pursuit.

Since we didn't discuss too much in detail, I can't really offer much else. This rate difference was my issue and I was just wondering what to do.

 

[Proffesor Jelskraft]

I will be working at the Spa, which is located on beautiful Lake Winnepesaukee, starting the first of the year. The spa owner is having a Day of Beauty to introduce me to her clients, and the public in general.

I will be doing chair massage at this event and hopefully schedule a few appointments for another day. I will be keeping my rate, and we have decided on a flat rate per session. I will be providing all of my own stuff but will have use of her table and music.

I'm going to have some printed materials ready by then for distributing, along with an incentive to schedule an appointment.

Any suggestions as to what would work to attract new clients in this setting? This area is slower in the winter months and much busier in the summer, since it is a tourist destination.

 

[pl2010]

congrats!

 

[SourSkittles:)]

We briefly mentioned that our fees differed and not much else, considering this was our initial meeting. I am guessing we'll discuss that further once it has been established that I will, in fact, be working in her space.



Since we didn't discuss too much in detail, I can't really offer much else. This rate difference was my issue and I was just wondering what to do.

I will be working at the Spa, which is located on beautiful Lake Winnepesaukee, starting the first of the year. The spa owner is having a Day of Beauty to introduce me to her clients, and the public in general.

Just a comment, as I don't know that you ever recieved what you were looking for in the original content of this thread. I know I wouldn't want to get into serious discussions about working somewhere without discussing the fee schedule a little more seriously (after all you're a business). I read, that you basically decided on working in the place, without having detailed info on what would be occuring there. Since you have put personal time into everything, you will have a better feel of the situation than someone like me, over the internet -- but, I think it could have set you up for a very unhappy turn of events. Luckily it did not and I'm excited for your second office.

I thought it might bear mentioning for those newbies in the business who may be reading this thread.

As for this:

I will be working in a new, second location in NH as an IC renting space from an MT who charges less than I do. She has a day spa and often receives tips in addition to her hourly rate.

In my private practice in MA, my hourly rate is higher than hers and occasionally receive tips, and I'm wondering what I should do in setting my fees.

Any ideas?

I'd consider having both therapists on the same rate, discussing to raise the rates mid-year 2008 to what you currently take in your first office.

Another consideration is each therapist charges differently, but it sounds like it is a spa setting, and that may be a bit difficult to get the public to understand or work with.

A third consideration, is raising the rates to something in the range of what her tips equal out on her fees - (let's say she charges $50 and regularly gets a $10 tip) - up the rates and charge for each therapist $60 and no longer accept tips.

Hope these ideas get you started.

 

[TheMadProfessor]

pueppi -

Thanks for your input. Since my original post, the spa owner and I have discussed fee schedules, and since I am an IC, I have decided to stick with my own [regular] fees, which differ by $5 by the spa owner.

It is not my place to tell her what she should be charging her clients, but as moose_goose pointed out, clients would not have a problem coming to me if I charged $5 more for a 1 hour session, as long as they felt they were receiving a good massage.

Although I will be working "under her roof" - I am a completely separate entity. I will charge what I feel I am worth, do the modalities I feel I want to do, and operate as I currently do, in MA.

We have agreed on a flat rate for use of the room, per session. I will make my own appointments (and if she wants to refer her clients because she is not available, as she has mentioned doing, I am going to have her give them my phone number so that I will make the appointments, not her, since I will be in charge of my scheduling).

I guess I was unsure about the direction this arrangement should take, but things are working themselves out, with all of the help and suggestions of MassagePlanetL posters, like yourself.

Thanks, PremoMT, for your good wishes!

Donna

 

[Navy ACC]

So glad you posted the update!

I know these threads are the ones people come back to often and every update gives me (personally) ways to think about how to work in different circumstances.

I hope you post again in a few months and let us know how the business is building!